How to solve for the current price in the given equation Face Value or (par value)= $1,000Current Yield= 5.01%Annual Coupon Rate= 5.59%Annual Coupon= 5.59%*$1,000Annual Coupon3 $55.90Current Yield= Annual Coupon/ Current Price5.01%= $55.90/Current PriceCurrent Price=3343536373839Coupon Rate (Excel)Current YieldBond PriceEnter

Bond valuation refers to a method which is used to compute the current value or present value (PV)…

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Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Q1. Price and Yield. Yield (%) Price at required yield ( coupon rate/ maturity) 6% / 5 6% / 20 3%/5 3% / 20 0% / 5 0% / 20 year year year year year year 3.00 4.00 5.50 5.90 5.99 6.00 6.01 6.10 7.50 8.00 Assume face value is $100. a. Plot the table. b. What is the shape of the price-yield relationship? c. Describe the general relationship you observe between changes in bond prices and changes in yield to maturity.
Inputs Annual Coupon Rate 3.70% Number of Years 6 Face Value (PAR) $1,000 Price $1,100.27 In Excel: a. What is the YTM? b. Calculate Macaulay’s duration and co c. Plot the price-yield relationship using Excel. Hint: (Calculate prices for different yields, e.g., yields from 0.5% to 23.5%; then your x axis is yields and y axis prices. The plot should show an inverse relationship .
Inputs Annual Coupon Rate 3.70% Number of Years 6 Face Value (PAR) $1,000 Price $1,100.27 In Excel: a. What is the YTM? b. Calculate convexity using Excel
Solve for the Yield using the following data: Frequency Semi If Held to Maturity 1 2 3 4 5 6 7 8 9 10 Coupon 7% Cash Flow (coupon payment) Note: in final period, you also get the Par Value ($1000) in a Maturity 5 Discount Factor = 1/(1+YTM/2)* Call Price Par Value Current Price Years til Call sss $ 1,000 PV of CF CF x DF $ 1,047 PV if held to Maturity $ $ 1,040 2 If Called 1 2 3 4 use =rate(...)* Yield to Maturity Yield to Call *don't forget to x2 Cash Flow (coupon payment) Discount Factor = 1/(1+YTC/2)* PV of CF CF x DF PV if called $ Note: in final period, you also get the Call Price ($1040) in addition to the Coupon.
What is current yield, assuming a par value of $1000? Type Issue Corp Solar, Inc. a. 1.90% b. 3.80% X c. 2.06% d. 7.80% e. 4.12% Price Coupon (%) Maturity 92.2 3.8 15-May-2030 Current YTM(%) Yield (%) 4.47 ?
Using both duration and convexity, estimate the new price of a 5-year 9% coupon bind with par calue of $100 and yueld of 9% that experiences a 100-basis-point increase in yield. $96.14 $96.10 $96.16 $96.12
what is the cost of Equity of KDP? Beta: 68 market risk premium:5.08% 3 month treasury yield: 5.34 % 10 year treasury yield: 4.27%
Use the following information to answer. Coupon Payments are annual unless otherwise indicated! Years Face Coupon Market Security Rating Maturity Value Rate Price Treasury 1 $ 1,000 0.00% $ 965.00 Treasury 3 $ 1,000 1.90% $ 939.06 Treasury 5 $ 1,000 4.30% $ 932.42 Treasury 10 $ 1,000 6.80% $ 1,007.12 Treasury 15 $ 1,000 6.60% $ 908.25 Corp A A 5 $ 1,000 8.10% $ 990.00 Corp B BB 10 $ 1,000 7.90% $ 859.88 Corp C AA 15 $ 1,000 7.00% $ 660.00 What is the default risk premium for a BB debt security (round to two places)
Bond prices. Price the bonds from the following table with semiannual coupon payments: ..... a. Find the price for the bond in the following table: (Round to the nearest cent.) Years to Yield to Par Value Coupon Rate Maturity Maturity Price $5,000.00 11% 15 8% %24
Use excel
input area: years to maturity: 14.5 coupons per year: 2 par value: $1,000 yield to maturity: 5.3% bond price: $987 find coupon rate on Excel with simple calculations and without using a function
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